Official statistics would suggest that just over half of our exports (51%) are directed to the 26 countries of the Union, a further 16% to other non-EU European countries. Europe would therefore be the recipient of 67% of our exports. A further 27% is equally divided between Asia and America (about 13% each), with the USA that, as natural, share representing about 10% of the total. The sum of Europe and the US, about 77%, gives support to the idea that we must first look to the West as our first market of Made in Italy and then, if possible, to Asia and Africa, relegated, together, to only a quarter of the total of our exports.
This text is a translation. You can found the original article on the website: italiaoggi.it and on the paper edition of “Italia Oggi – Number 081 page 11 of 07/04/2021”
This view is incorrect, because the official statistics published by ISTAT concern only direct bilateral relations between Italy and the importing countries, often fail to take into account that the country of first importation of our products is not the country where the goods are consumed, but these are then «routed» to third countries that are the final consumers. There are three types of flows that are not present in official statistics.
1) The first and classic example is the well-known «Rotterdam effect». the Dutch port is main hub in Europe of the traffic of containers towards the rest of the world, but sometimes the official statistics record our export like «towards the Holland» and not towards the final consumer that could be in any other part of the world, Asia, America or Africa. In doing so, we overestimate exports to EU countries (the Netherlands) and underestimate exports to non-EU countries, which, in essence, are our real customers, those who eat our food at the table, those who dress in our fashion and those whose factories use our machinery for their manufacturing industries. They are the final consumers who decide whether to buy and consume our made in Italy and to whom the due attention of marketing, branding and image must be directed, and not the employees of the containers of Rotterdam.
2. The second type of flows not included in official statistics shall be the intermediate goods which Italy exports to the first country of import and which it reprocesses, amends or assembles in a final product which is then, in turn, exported to the country of end-use. Classic example, are our car components that we sell to Germany, but that end up in the cars sold by BMW around the world.
For Italy the share of intermediate products in the total is about 50%, so about 250 billion of our export is not said to be used in the first country of import, indeed, with the growing complexity of the Global Value Chain, A large part of it ends up in countries further and further away. Even this dynamic is not present in official statistics, which therefore overestimate exports to countries of first transit and underestimate exports to countries that consume products: in which roads of the world circulate BMW. In this scenario, the conquest of the final customer is a bit more complicated than the previous case which dealt with a simple transhippment, without any modification to the products.
Here, however, the made in Italy, is within the final product. Sometimes it emerges as added value in the eyes of the customer («This dress produced and designed in Shanghai is however made with fabrics made in Italy»), sometimes not. Our marketing effort, therefore, must follow multiple channels and, remaining at the example of the automotive sector, Paradoxically, we should also be cheering for Germany to sell more Bwm in Asia or elsewhere.
3) The third and even more complex to monitor is the purchases of foreign tourists in our territory, divided between goods and services, because despite national statistics provide for the presence of separate accounts for tourism, Not all transactions are well associated with the nationality of the customer who made the purchase. Sometimes the payment of a pizza in Rome is made in cash, sometimes the purchase in duty free of a bag is made by intermediaries, sometimes even by the final customer but with accounting on the partner country confused. Example: if a Prada bag is bought by a Chinese in a Tokyo store, where does this figure appear in the export statistics?
I believe from these few examples, it is clear that things are more complex than they appear on the surface in the eyes of non-experts. We have tried and our preliminary analyses have somewhat reversed the official statistics and the picture that emerges is very different from the general narrative: the European Union, with these corrections now represents only 36% of our export (and not 51% as you think), the total of Europe is no longer the original 67%, but only 48%, while America rises from 13% to 18%.
But by now you have already guessed, the biggest difference is between Asia and Africa that go from 18% «official», to 33%, almost double. Going deeper, you will also have guessed that the big difference is precisely due to China which, in fact, is our fourth, I repeat fourth, trading partner, after Germany, USA and France and on par with the United Kingdom, and which is the recipient of about three times, I repeat, three times as much, of the EUR 13 billion that official statistics tell us.
Unfortunately, those of us who mix foreign policy with trade policy should take into account these dynamics and well evaluate their actions and words with the utmost care and without hysteria or search for futile «I like»Because any mistake or underestimation of the true importance of emerging countries, China, Asia and Africa, will fall on the shoulders of our companies and our workers, certainly not on their. My advice, as a technician, to the country always remains the same: do the analysis first, think and then decide. It seems obvious, but today it seems no longer to be so.
You can read the original article at the sources below. (Italian Language)